11.05.03

Cantwell Wins Huge Victory for Energy Ratepayers Still Footing the Bill for Enron Scams

WASHINGTON, D.C. – Today U.S. Senator Maria Cantwell (D-WA) won a hard fight for consumers as the U.S. Senate agreed to ban market manipulation schemes like the ones Enron used to bilk customers during the energy crisis.

Cantwell explained, "This amendment is so basic and simple that many Americans, and I can guarantee you many Washingtonians, probably thought it was already law. It simply says that energy markets that are manipulated to scam ratepayers should be against the law.

"Some public power utilities have had as much as a 50 percent rate increase because of Enron's contracts that were manipulated during the energy crisis. While Ken Lay remains uncharged of crimes, ratepayers in Washington state will be paying the high price of those manipulated contracts for the next five years.

"In today's economy, it is hard enough to pay all of the bills without having to worry about being gouged by deceptive companies. This amendment will give consumers something to fight with."

Cantwell's amendment passed today 57 – 40, a huge change from the last time she tried to introduce it a few months ago when it lost in a close match 48 – 50.

Background:

While the Senate has been considering proposals for energy legislation over the past two years, various investigations have unearthed Enron's "smoking gun" memos—detailing the company's schemes to drive up electricity prices—and other evidence leading the Federal Energy Regulatory Commission (FERC) to conclude that market manipulation was "epidemic" in western markets during 2000-2001. This energy crisis continues to take a serious toll on American consumers and businesses: it's been estimated that, as a result, the West has lost $35 billion in domestic economic product—in other words, a 1.5 percent decline in productivity and a total loss of 589,000 jobs.

While the Enron schemes are most familiar, numerous market participants have engaged in abuses throughout the country. Unfortunately, the Domenici substitute electricity amendment to S. 14—and likely the energy bill conference report—would ban only one type of manipulation (round-trip trading), and ignores the many other practices used by companies to drive up power prices. At a time when our nation is struggling to recover from recession, Cantwell's amendment would ensure that the kind of rampant manipulation that contributed to the largest electricity crisis in history is never repeated.